IDEAS & TRENDS; If It's the Internet, Down Must Be Up

THE Internet got some really bad news last week, so naturally it was really good news too. Sure, cyber-hackers paralyzed a number of powerhouse Web sites, including Amazon.com, Yahoo and eBay. But now Internet security consultants find themselves doing a land-office business.

So it goes with the new economy. Of the thousands of dot-com companies now in existence, the number to have actually turned a profit can be counted on the fingers of one hand. Yet there's plenty of money being made by everyone else.

Like in TV: Internet companies accounted for nearly half the advertisers on this year's Super Bowl broadcast, which commanded a record $2.2 million on average for each 30-second spot. Before that the Y2K troubleshooting industry cleaned up. And of course, inflated stock prices have created billions in new private assets, which in turn have emptied luxury-car showrooms.

Those who follow the industry say the paradox of capital flowing every which way but into the black for the dot-coms isn't all that surprising. After all, money has to go somewhere.

''It's where he talks about how paying people to dig holes in the ground, and fill them up, could actually make sense, because of the virtue of getting all that money into circulation,'' he said via e-mail. ''In a sense, this is a newly elegant flip on Keynesianism: Pay people to start companies that never make money, but that spreads a lot of money around to others in the meantime.''

But this isn't necessarily a permanent state of affairs, say others. ''It's temporary,'' said Professor Donna L. Hoffman, the co-director of the Electronic Commerce Research Laboratory at Vanderbilt University. She noted that for now, much of the money is going into infrastructure, including the development of Web sites; it's going to businesses serving other businesses.

''That's where people are making the money,'' she said. ''The Internet is indeed profitable, but it's starting in the center and moving outward.'' Eventually profits will be made in business-to-consumer transactions.

In the meantime, the present state of the new economy is illustrated by the boom in security consulting sparked by last week's cyber-sabotage. ''The first thing I thought when I heard the news was, 'I have to buy stock in security companies.' '' Professor Hoffman said. ''The only question was, which one?''